Here’s some useful advice to help you stay on the right side of the law when attempting to collect money owed to you.
- Don’t abuse the debtor. This just antagonises the situation and doesn’t resolve anything.
- Don’t fight with a debtor. No one wins a fight with a customer.
- Don’t accept any small payment plans at all, unless there’s no other option.
- Don’t accept any deals with debtors, unless they’ve signed an agreement with you, perhaps even offered you post-dated cheques.
- Don’t physically threaten or touch anyone.
- Don’t ever write off any debts. Look around for a debt collection agency, especially one that will not charge a joining fee, but they may take a small commission of the whole amount collected usually 15%. Let them try to get the money. It’s best to get 50% of something than 100% of nothing.
It’s not your responsibility that your debtor has fallen into arrears, nor is it your fault. Sometimes debtors try and make you feel that you’re the cause of their problems with payments. Ask them, point blank: “If someone owed you this money for so long, would you just let it go? No, you would not. Then how can you ask the same of us?”
Think, “I did not run up this account, why then should I feel guilty about asking for what rightfully belongs to my business or me?”
Some people feel horrible or ill about asking for money. Just take a breath and think, “Did I order the goods? No. Did I ask for overdue bills? No. I understand that they may be in arrears but avoiding me is not helping me. Making me feel guilty if they see me is not helping me.”
You are the only one in control of your feelings and no one can make you feel anyway unless you allow them to. Keep thinking, “I am being reasonable here, they owe the money, I am not asking for anything that is not due to me, I am not being rude or abusive.”
ALWAYS think outside the circle. Don’t just accept that they’re never in. If you’re not happy that “the cheque’s in the mail”, then question and LISTEN. Because you get more information from listening than you do from talking. And often by listening you can hear if your debtor trips themselves up. You can then call them on it. Ask them, “Why did you then run up the account if you were not working? Why did you not tell us earlier?
ASK QUESTIONS CONSTANTLY.
After all, it is your money they owe you.
Sometimes debtors or business feel that you are being obstructive. Explain that they have an outstanding account and that you would be happy to answer these questions if the money was owed by you to them. Explain that all you are trying to do is work with them to find a solution to their problems.
Do NOT attempt any of the following
There are some things you’re NOT legally allowed to do in the pursuit of a debt:
- You cannot employ bikers to go and pay the debtor a visit.
- You cannot ring after 9pm or before 7.30am.
- You cannot go onto the debtor’s premises to remove the goods or work that you carried out.
- You cannot threaten them with a 4 x 2 block of wood.
- You cannot divulge information to a third person about the debt.
- You cannot demand the money out of the person’s salary from their employee.
- You cannot place an advertisement in the paper telling everyone the debtor owes you money.
- You cannot place a returned cheque on the wall or in view of your business for all to see (Yes, this was really popular years ago).
- You cannot make a person believe that if they do not pay you’ll pursue criminal charges for the alleged criminal activity they may have done nor tell them if they pay you will not go to the police. This is extortion.
- You may legally have to continue to trade with your debtor if they do not pay their outstanding account, this is under some extreme circumstances.
- You cannot ask a police officer friend to pay a visit in their uniform to “scare” debtors into payment.
Also, read more about Locating Missing Debtors.
